Welcome back to the Agrifintech newsletter!
2023 powers to a close. My last piece on Traive and AI was extremely popular, so I appreciate you taking a look and don't forget to jump in if you haven't already. This issue is a lighter read with a catchup on recent announcements and then a look at the top question I get asked by readers and contacts - what exactly do I do?!
📣 Updates from our friends and colleagues at:
➔ Syngenta and Syde 🇧🇷
➔ Vegrow 🇮🇳
➔ DGV 🇮🇳
➔ Jala Tech 🇮🇩
➔ Twiga 🇰🇪
🚂 2023 powers to a close
Below we have yet another intriguing financial product update from Brazil and a strong close to investments for the year with almost $100m announced in the past month globally (and even a few others that have not yet been publicly disclosed).
📱 Syngenta celebrate 1 year of Syde in Brazil.
Syde is billed as the first digital account for Brazilian Agribusiness, which allows users to make bank transfers, pay invoices and pay utility bills. I've only just seen this come to life and it looks awesome. 👏
It is very early days for this product but it is a fantastic use case for embedded finance. Firstly, Syngenta have not built their own bank, they have built on the shoulders of giants by developing their solution on top of existing banking tech providers and integrating with 5 banking partners in the local market.
Brazil is one of several countries globally that also a top class payments system, PIX, which the wallet has integrated with also.
The solution originates transactions for it's financial services users rather than taking on credit risk itself - “Our job is to originate and bridge the gap between producers and financial agents” leader Fabio Neufeld commented in an earlier article.
I look forward to hearing more about this and getting some of the metrics when they are available.
🏪 Vegrow announce a $46m Series C investment from a stellar group of investors including GIC, the Singapore sovereign wealth fund, Lightspeed Ventures and Prosus Ventures.
The company has developed a marketplace for the $43bn a year Indian fresh produce market which is still seen as very fragmented.
This raise is just one year after its Series B round for $25m - pretty impressive in an otherwise quiet market.
Fresh produce is a tricky corner of the market to tackle due to the perishable nature of inventory, but increasingly tech companies, such as Vegrow, are employing data analytics to match buyers and sellers and also reduce food waste.
Others players in this space to watch are ProducePay, Nile, Frubana, all tackling different markets from different angles. 👀
🐂 DGV, the India based and dairy focused fintech raised $6m from investors to further expand its geographic footprint in the Indian provinces from its existing strong base in Gujarat.
Since its most recent fundraise the company has developed further integration partners across the livestock value chain in product and asset discovery, pricing and animal productivity according to this report.
🦐 Jala Tech, the Indonesia based, shrimp farming management startup, added $13.1m to the funds raised by companies in the Southeast Asian country this year.
Jala offer a marketplace for buyers and sellers, but also rely on data to add rounded visibility on the operational and financial health of shrimp farming clients and will use funds to expand their operations with Indonesian buyers.
In 2022, investment exploded in Indonesia and has kept pace this year, with investors increasingly attracted to one of the densest populations anywhere on the planet and its huge potential in the aquaculture sector, where exports approached $6bn last year.
Similarly, investment into the aquaculture sector has been 🔥 this year, with eFishery becoming the first Indonesian unicorn back in September by raising $200m.
📦 Twiga secure a $35m convertible note debt from existing investors.
Twiga have been a darling for Africa focused investors in the past 7-8 years but recently ran into trouble with some of their software suppliers over aged debts. This played out in the courts when a supplier forced the company into liquidation with up to 100 other suppliers also suffering late payments according to one report.
This announcement, from existing investors, is surely designed to steady the ship for the company which has raised c. $105m in recent years.
When they raised funds ($50m) in 2021, I noted it was very speculative for a Series C as it was for geographic expansion in East Africa, market launch in West Africa and also the establishment of its own primary ag production in Kenya. It felt like too much was happening.
Aged payments aside, I'd love more insight on the company and hopefully we get more positive news from them in 2024.
Eh, so what do you actually do?
A straightforward question, yes, but it hasn't been a straightforward answer as I wasn't quite sure myself for some time.
However... what is working for me is doing co-creation of financial products alongside Agritech companies.
What is this co-creation you speak of? This starts with discovery of financial problems and needs within an Agtech companies users (producers or agribusiness) who either want some kind of financial solution or, in some cases, specific financial data.
Once this has been mapped out, I typically look at solution providers and we start to build a business case to see if the economics work.
💚 I absolutely love the creative and commercial process. I also think this design element will explode in importance in the next few years. Look at the Syde example above, the technology is there, the distribution is there, it just requires some thought and design.
Ok, how does it work? Yes, I ask for commitments from clients, but this is not a consulting model. I invest my time, resources and brand to design products and services to sell with clients and take a stake in any new ventures, or joint ventures created. That said, some large clients do prefer to pay me as their cap tables are busier than Piccadilly Circus. 😅
Fortunately, I have several budding use cases in the works and I'd love to share more when they are ready. Unfortunately, there have been misses too. 😬
Do you have anything worth exploring? Get in touch.
Anything else? Yes..
⦿ I have done straightforward consulting work for companies and I'm sure will do more if available.
⦿ Reach out if you have developed software or a financial product and want to explore different markets for it. I'm lucky as I speak to financial institutions globally in the Agri finance space.
Above is not my pitch btw, but just me giving an update. However..... if you do feel compelled to have a chat, then do just respond to this email. 😉
Have a wonderful Christmas 🎄 🎅 and an even better 2024. See you on the other side. 🙏